Canadian Retailer - Spring 2014 - 46

PARTNER MESSAGE

NEGLECTED EMPLOYEES LEAD TO
CUSTOMER NEGLECT, RESULTING
IN LOST PROFITS

Improving the basics of floor associates' employment improves matters.
Advances in technology for human capital management can get you there.
BY JOHN ORR, SVP of Retail Strategy & Execution, Ceridian
IN RETAIL, customer engagement is critical to ensure loyalty This satisfaction grows wherever retailers'
to the brand. If associates are disengaged, unproductive and support services, systems, and policies imnot attentive to the customers' needs, customer dissatisfac- prove and streamline employment for assotion will fester and disloyalty will snowball. A positive, helpful ciates. Employees reciprocate by producing
floor associate, however, engenders the customer satisfaction more and being more attentive to customand loyalty that retailers are always looking for. Retention of ers' needs, and by deciding to stay longer
store associates and customers alike hinges on the attention as well. This, too, translates to a better customer experience.
retailers pay or do not pay to engaging their employees.
More and more today, retailers are seeing the convergence
of HR and operations-the two go hand-in-hand. Advance- Here's the Supporting Research
Research links increases in employee enments in human capital management (HCM) solu- tions
gagement to an array of other dynamics found
enable the human elements of reward for
or implied in the Service-Profit Chain. One
work, flexibility for predictable work-life
of the best examples is a 2013 Gallupbalance, and the financial and operconducted meta-analysis which shows
ational elements to co-exist, as they alstrong correlations in several areas. For
ways should. As a result, associates' pay,
RETAIL
employee engagement and profitscheduling, time and attendance,
ability, aggregates across several
and benefits can and should reside
industries show that companies
together, in a technological soluoperating in the top-quartile in
tion. Executed well, core HCM
terms of employee engagement
gives order to floor associates'
EMPLOYEES
CUSTOMERS
post a median profitability 22
work-life balance and enhances
per cent higher than those opercommunication and engageating in the bottom quartile. That
ment. Sam Walton, founder of
percentage has crept upward for
Walmart, said it best when he statmore than ten years, ever since Gallup
ed, "If you take care of the employee,
the employee will take care of the customer, and the business first conducted the analysis. For these same
companies, Gallup's research shows 21 per
will take care of itself."
cent higher employee productivity and, in
Here's the Supporting Model
high-turnover industries such as retail, 25 per
Symbiotic relationships exist between floor associates' cent better retention. For every employee/
happiness and levels of engagement, customers' satisfaction associate who leaves, it costs on average of
and loyalty, and increases in profits. Models illustrate these $3,000 to $5,000 to recruit, hire and train andynamics. The Service-Profit Chain, for instance, captured other. Better retention, or extending the stay
these concepts several years ago, in Harvard Business Review. of an employee, saves money.
Business leaders recognize the importIt suggests that the value of services provided to customers
ance of employee engagement, retention and
influences customer satisfaction and loyalty, which stimulate
profit and growth. Floor associates who are loyal and product- performance. At the 2013 National Retail
ive deliver better value. They do so because they're satisfied. Federation Convention & Expo, Ceridian

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